shifters and wheretouched masters fit perfectly in ddo (lore wise)
Merfolk are a waste of time, a underwater action item emulates their entire race.
Lore wise they were never fleshed out all that much for Eberron.
What about the fish smell?
If we had plenty of content related to water it might be ok (although they need magic to walk on land, meaning a disdjunction orb would have them flailing on land like any other fish XD), the dev's have already tried underwater combat and kinda failed (red fens)
Especially the state the game and dev team is in now, i wouldn't keep my hopes up, the latest pack looks terrible and that was a premade pack.
Keeping in mind how the game looks today (old game engine and all), merfolk could look a lot like this: